Friday, September 18, 2015

Big problems in Minnesota?

Both Mr. Dilettante and Powerline have linked today to a very interesting report from the Census Bureau that suggests that median household income among black families declined about 15% in 2014 vs. 2013 levels. Now the Star-Tribune article addresses the matter predominantly as an issue of "government isn't doing enough to help blacks", and Powerline addresses the matter as a consequence of an influx of Somali refugees, but there is a problem with both hypotheses; neither factor is big enough to account for a sudden drop in income among blacks. For that matter, even Adrian Peterson's suspension last year would not move the median significantly. Nor is it sufficient that a number of charities were recently found to be corrupt--those operate on "lower incomes" and have little effect on the median.

So what is going on? Here are some hypotheses:

Nothing. Census data here are just flawed for whatever reason.

Minnesota companies suddenly decided that Klansmen made the best HR managers, black people paid the price, and nobody at the Star-Tribune or Pioneer Press noticed the shift in employment numbers.

Black Minnesotans decided to start underestimating their income when polled by Census.

Black Minnesotans responded to the Michael Brown tragedy by quitting their jobs, and nobody at our state papers noticed.

Hiring managers responded to "Black Lives Matter" by refusing to hire blacks. (but how would this get a 15% shift in only four months? And the Strib didn't pick up on this?)

To be blunt, none of these hypotheses is very appealing, and most are just ludicrous. However, the fact of the matter is that, since a median household income is simply about $15/hour for 40 hours per week, or a little above the wage of one person's factory or retail job, the big thing that could shift this level for real would be mass unemployment among blacks--and we haven't seen that.

In my view, the most likely issue at hand here is that there is something wrong with the Census Bureau's numbers. Perhaps their sample is too small, and they stumbled into a bunch of low income people. Perhaps they made some other error with their method.

However, whatever the real issue is, somebody needs to take a good look at these numbers, how they were collected, and what other numbers indicate about the status of blacks in our state. If it's not just error on the part of the Census Bureau, we're not talking about something that can be fixed with a governor's initiative, but rather something that just might involve prosecution.

If it is mostly an error on the part of the Census Bureau, then it's yet another example of how we may need to be very cautious when using government derived statistics--a famous example being how employment numbers for the past six years have been "unexpectedly" low. And that says a lot, I hope, to those politicians who would use government numbers to "manage" the economy.